Let’s start on Staking or (POS) Proof of Stake. POS was developed to solve the issues on the original algorithm for verifying Bitcoin transactions in the Blockchain, which is called (POW) Proof of Work, also known as crypto mining. When you want to put your computer to work by verifying transactions, you get a Bitcoin as a reward, just like mining.

Crypto mining became so competitive wherein, a more advanced hardware that can work / solve more puzzles, and later, even more, like ASIC Application-Specific Integrated Circuit, sole purpose is to mine Bitcoin, comes out every couple of months… Making whatever you’re using less profitable or at times, obsolete.

Bitcoin’s algorithm for verification or POW is too complicated and difficult, that it requires a lot of power/electricity to run. POS or Staking was made verifying a transaction in the Blockchain very easy and light, in terms of computing and electricity required. With POS an account / a wallet is chosen in a (pseudo-random) or deterministic way, pseudo because although it’s random more chances go to the accounts with a higher balance / coins / wealth to stake i.e Staking Coins.

Also, staking your coins means that your coins (information e.g. amount, transactions, etc.) are used to verify other transactions, which means you have to keep them in there while you’re staking them. There are a few coins that you can use for staking. Coins differ from each other in a number of ways. Some coins, when staked, mature early than others, e.g., 6 – 12 hours.

Some take 1 day and some can even take days before you start receiving staking rewards. A wallet has to run 24/7 to make sure that your coins that are being staked can mature and begin to receive rewards.

Each coin has its own unique purpose or function. Like the different apps on your phone, you have to download and install them separately and run them all together at the same time 24/7. This a very secure way of storing your coins.

But If this is a problem for you, and you’re willing to take the risk of letting a third party handle your coins (e.g. exchanges or pools), you can take advantage of joining a pool of users, staking coins by combining everyone’s coins and run it in a single wallet (third party), rewards (minus) fees then are distributed accordingly.